The US dollar index finds short-term support at the 38% Fibonacci retracement around the 95 price level. Last week, the price got rejected at the resistance trendline and broke below the cloud. Backtesting of the broken cloud could see the price bounce towards 95.50, but overall short-term trend is bearish and could push the price to 94.
Green line – resistance
The US dollar index got rejected last week and is now trading below the cloud support, but just above the 38% Fibonacci retracement. This is important support so a 4-hour close below 95 will be a bearish sign that the price could continue lower towards 94.
Red line – resistance
Green line – support
The US dollar index as we expected got rejected at the weekly kijun-sen resistance and pushes towards 94 weekly cloud support. A longer-term support inside the cloud is the 92 level where we find the 38% retracement. We are inside a bigger bullish flag pattern but will prefer to wait before trying any long positions again.
The material has been provided by InstaForex Company – www.instaforex.com